SEC Revises Compliance for Private Fund Advisers

Nov 29, 2011

The government has introduced a new reporting requirement for private fund advisers under the Dodd-Frank Wall Street Reform and Consumer Protection Act, a form that proponents say will prevent new risks and that critics call burdensome.

In partnership with the Commodity Futures Trading

The government has introduced a new reporting requirement for private fund advisers under the Dodd-Frank Wall Street Reform and Consumer Protection Act, a form that proponents say will prevent new risks and that critics call burdensome.

In partnership with the Commodity Futures Trading Commission, the Securities and Exchange Commission has introduced the 43-page form, which must be submitted by advisers working with private equity, money market, hedge and liquidity funds, The Deal magazine reports. Those entities will have to give information on the type of investments, counterparty exposure, liquidity and other issues, which is a far cry from previous regulations.

"You are going from an environment where customers and prime brokers didn't have to tell anybody what you are doing," Henry D. Kahn, a partner at Hogan Lovells US LLP and regulatory law specialist, told the magazine.

To fall in with the new requirement, compliance professionals may need to work with other departments in their companies or hire new people outright, according to Reuters. Marcy Engel, the COO and general counsel for hedge fund Eton Park Capital Management, said the change would bring more requests for information that isn't readily available, as quoted by the news source.